At the end of 2013, the largest water companies in Scandinavia joined forces to solve problems that arise during repair works and re-joining of water pipes that can cause leaks and accidents as a result. Pre-commercial procurement offered a simple way to get two solutions successfully developed and tested in one year time. Benefits for the procurers: faster, cheaper operations and reduced supplier lock-in. Benefits for the companies: solutions have been successfully commercialized and deployed.

Picture of accident with deformed water pipes

Autumn 2013, four suppliers (Viking Johnson, Friatec, Agru, Tega) were awarded a contract for the 1st phase of the PCP, for the value of SEK 100,000 each, to carry out a concept study of their proposed solutions for two months. Two suppliers were awarded Phase 2 contracts: Friatec (Germany) and Tega (Turkey). These received SEK 300,000 each to develop prototypes and to test these in collaboration with the S4 group of Scandinavian procurers, lead by Norvatten in Sweden.

The pre-commercial procurement contract assigned all intellectual property rights that arose during the project to the suppliers so that the suppliers could commercialise the solutions widely. The result of the PCP was that two new products for joining water pipes were developed and tested in the autumn of 2014 and were presented at a conference organized by the 4S group.

The products were shortly after the testing incorporated in the suppliers' regular product range. The benefits achieved by the PCP for the procurers were summarized by 4S as:

  • Two innovative new products available that solve the problem
  • PCP as a procurement method works well (4S has done another PCP in 2015)
  • Shorter time from discussion to result
  • Lower cost for development
  • Reduced supplier lock-in / Freedom to buy the best solution from the best vendor on the market after the PCP

The solutions of the two vendors that successfully completed the PCP have been procured in the meantime by a number of  water companies across Europe. Considering the total cost of the pre-commercial procurement of SEK 3,200,000 (implementation and contract costs) against the cost per leak of about SEK 600,000, the socio-economic benefit of the pre-commercial procurement is great.

More information in the full case description.

 

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